/// PwC Outlook: TV’s Growth Prospects Look Strong

June 12, 2012  |  Media Week

If the upfront marketplace does not appear to be as strong as broadcasters previously had anticipated, an inundation of political and Summer Olympics dollars will go a long way toward keeping the networks flush in 2012. According to PricewaterhouseCoopers’ newly released global entertainment and media outlook for 2012 through 2016, U.S. broadcast ad revenues this year are on track to reach $18.9 billion, a boost of 7.3 percent versus $17.6 billion in 2011. Per PwC’s calculations, broadcast’s Compound Annual Growth Rate through 2016 will be 4.6 percent, a formula that translates to a total ad sales haul of $22.1 billion in the next presidential election year. Should that indeed prove to be the case, broadcast sales revenues will have grown 16.8 percent between this year and 2016. Naturally, if this year’s broadcast revenues are to expand in any significant way, the outlying scatter quarters will need to improve. With upfront budgets flat to slightly down versus the 2011-12 bazaar, demand for Q3 and Q4 scatter will have pick-up. As only The CW has completed its upfront deals , it’s too early to say how much inventory the nets will hold back for scatter; that said, with softer demand and unspectacular CPM increases, it stands to reason that when the market wraps later this month, all players in the broadcast space will have more inventory on their plates than they did a year ago. Even if scatter remains unremarkable—Q2 pricing is up around 10 percent versus last year’s upfront rates, no great shakes when you consider that some nets were commanding premiums of as much as 40 percent heading into the 2011-12 bazaar—political and Olympics dollars will offer a reliable seasonal adjustment. Higher ad spending in battleground states and an influx of Super PAC money should set the stage for a frenzy of national post-convention buys. All told, political spend could contribute as much as $2.5 billion to TV’s coffers, although naturally, local buys will account for a good chunk of that spend

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PwC Outlook: TV’s Growth Prospects Look Strong



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